Customer Switching in Australian Electricity

Published by: Datamonitor

Published: Dec. 17, 2008 - 27 Pages

Table of Contents

DATAMONITOR VIEW

CATALYST

SUMMARY

METHODOLOGY

CUSTOMER SWITCHING IN RESIDENTIAL ELECTRICITY

Australia's customer switching rate continues grow

Despite high switching rates in Victoria and South Australia, less than half of Australians in competitive states have switched supplier

One-third of switchers will consider switching again in the next 12 months

Emergence of new entrants is providing customers with more choice

Driving the switching decision

Switching supplier remains a key method of reducing energy costs, behind energy efficiency

Door-to-door salespeople still have the greatest impact in driving the switching decision

Consumers are more reactive than proactive, with consumers rarely approaching more than two potential suppliers

Price comparison websites are becoming a much more useful source of information to switchers

Impact of inertia and customer satisfaction on switching

Non-switchers remain with their current supplier as generally happy and yet to look into switching

Switchers' expectations are also being met by their new suppliers

Summary

APPENDIX

Definitions

Sources

Further reading

Ask the analyst

List of Tables

Table 1: How many times have you switched supplier?

Table 2: Nearly two-thirds of customers in South Australia have switched and over 50% in Victoria

Table 3: Customers are more willing to reconsider switching within a shorter time span

Table 4: Market share by type of supplier in Australian competitive electricity markets

Table 5: Australians are highly likely to consider offers from new entrants

Table 6: New entrants are making headway into the market through competitive offers and getting to customers first

Table 7: Some 16% of respondents had switched supplier in last 12 months as a means of reducing energy costs

Table 8: What triggered your most recent decision to switch your electricity supplier?

Table 9: Twice as many customers have been approached by suppliers than have themselves proactively approached a supplier

Table 10: Switchers have clearly been both better targeted and more active in seeking a new supplier

Table 11: Price comparison websites were useful to 21% of switchers

Table 12: Happiness with current supplier and lack of proactivity declining as reasons for not switching

Table 13: Less than half of Australians would be moderately or very likely to switch for a 10% saving

Table 14: Comparing reasons for not switching with likelihood of switching for a 10% saving

Table 15: Customers expectations are being met or exceeded by their new suppliers

Table 16: Lower prices and loyalty bonuses are the most attractive propositions to retain customers

List of Figures

Figure 1: Customer switching by state, January 2003 - October 2008

Figure 2: Over half of Australians in competitive states have not switched supplier

Figure 3: Nearly two-thirds of customers in South Australia have switched and over 50% in Victoria

Figure 4: More customers are expecting to consider switching again within a year

Figure 5: Market share by type of supplier in Australian competitive electricity markets

Figure 6: Australians are highly likely to consider offers from new entrants

Figure 7: New entrants are making headway into the market through competitive offers and getting to customers first

Figure 8: Some 16% of respondents had switched supplier in last 12 months as a means of reducing energy costs

Figure 9: Door to door sales continues to be the most successful tool in attracting switchers

Figure 10: Twice as many customers have been approached by suppliers than have themselves proactively approached a supplier

Figure 11: Price comparison websites were useful to 21% of switchers

Figure 12: Moneysupermarket's price comparison site for the UK illustrates the potential for price comparison and switching sites

Figure 13: Happiness with current supplier and lack of proactivity declining as reasons for not switching

Figure 14: Less than half of Australians would be moderately or very likely to switch for a 10% saving

Figure 15: Customers expectations are being met or exceeded by their new suppliers

Figure 16: Lower prices and loyalty bonuses are the most attractive propositions to retain customers

Abstract

• Survey of 1,000 Australian households, examining reasons and triggers for switching, anticipated future behaviour, and reasons behind non-switching.
• Penetration of new entrants in competitive states and customer acceptance of offers from new entrants.
• Analysis of key sources of information for switchers, including proliferation of price comparison sites.

• Track the progress of switching by state and changing consumer drivers.
• Evaluate key sources of information for consumers when switching supplier.
• Identify trends in customer inertia and to how overcome it.

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